How an Investment Index Works

Mark is back after almost a month off for the holiday and he’s got an episode full of wealth management tips ready to help you tackle your finances. This week’s episode begins with some Slott updates, a review of the current state of the market, and some discussion over relevant headlines. For the Financial Fifteen topic this week, Mark discusses how an investment index works.

 For the headlines this week, Mark explains how the Bureau of Labor Statistics will be releasing the Consumer Price Index tomorrow and we’ll be able to see what the inflation was for June. Mark talks about how the FED will use these numbers to decide whether they’re going to continue hiking rates or not, and what we can expect from those decisions.

For the Slott Updates, Mark chose two updates to share with you. The first is about 60-day rollovers and required minimum distributions, a subject he touches on often in previous episodes. The second update Mark shares has to do with using an IRS Uniform Lifetime Table to withdraw his RMDs. So, Mark takes some time to talk about RMDs and IRAs and how to navigate them within a larger financial plan.

Mark wraps up the first part of the Weekly Webinar with a recap of last week’s numbers from Wall Street and his interpretation of what we’re seeing in the markets right now. He talks about how investors can look for ways to guard themselves against significant losses in an unpredictable market while also having the opportunity to take advantage of growth. For Mark, the answer lies in strong asset allocation and account segmentation where you divide up your accounts so that they’re specifically funding each part of your life in retirement. He discusses how you can navigate between being optimistic about the growth of our nation while also being defensive so you don’t lose too much money if things go south in the markets.

How an Investment Index Works

Mark uses the recent numbers he went over from Wall Street to explain what an investment index is and how it works. Basically, a financial index generates a numerical score by considering inputs like different asset prices. It serves as a standardized measure to monitor the performance of a collection of assets. Indexes are commonly used to gauge the performance of a group of securities that aim to replicate a specific market area. These indexes can be broad in nature, encompassing the entire market, such as the S&P 500 or Dow Jones Industrial Average (DJIA). Alternatively, they can be more specialized, focusing on specific industries or segments. For example, the Russell 2000 Index tracks small-cap stocks exclusively.

Using the S&P 500, which was launched in 1923 with just 233 companies, as an example, Mark is able to show how indexes work to measure the popular markets we follow today. He goes into detail about how the companies participating in today’s S&P 500 are measured and recorded and defines some popular terminology that you may see when researching the stock market. For anyone looking to find success in the markets, this financial fifteen can be a great place to gain a solid understanding of how they work and what to look for.

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The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

Attleboro Wealth Management, LLC is a Registered Investment Adviser. This program is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Attleboro Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Attleboro Wealth Management, LLC unless a client service agreement is in place.

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0:00 – Introduction & Upcoming
03:46 – Headlines of the Week
04:29 – Slott Update
14:58 – Market Report
17:31 – Market Indexes & Analyst Reports
26:49 – The Financial 15: How an Investment Index Works